As soon as once more, Californians are battling over the way to compensate and incentivize rooftop photo voltaic. Final month’s California Public Utilities Fee (CPUC) proposed determination (PD) replaces a shortly withdrawn PD from 2021. The 2021 PD would have lowered the compensation for exporting energy to the grid — which is often almost half of a system’s output — and imposed a month-to-month grid-usage cost on photo voltaic households averaging about $50 monthly. The brand new PD eliminates the month-to-month cost and slows the decline in export compensation. Current photo voltaic houses are exempted from any change.
In comparison with the CPUC’s 2021 proposal, it is a massive shift in favor of rooftop photo voltaic. However the PD’s reasoning stays cold-eyed concerning the candy deal photo voltaic households are getting. The brand new PD acknowledges that photo voltaic clients obtain compensation many occasions greater than the worth they ship to the grid, that this extra compensation causes a big price shift onto households with out photo voltaic, and that these solar-less residents are disproportionately poorer than photo voltaic adopters. Sure, some fortunate low-income households profit from focused photo voltaic incentives, however the overwhelming majority received’t have photo voltaic for a decade, if ever. So their charges pays for all the photo voltaic subsidies, a form of photo voltaic rooftop Starvation Video games.
The fee-shift conclusion is supported by the analyses of the utilities, which the rooftop photo voltaic advocates argue exhibits is simply big-utility driving the regulatory bus. However additionally it is supported by analyses from the CPUC, the CPUC’s unbiased Public Advocate Workplace and The Utility Reform Community (TURN) — each of which disagree with the utilities on just about every part else — in addition to the Pure Sources Protection Council, one of many main environmental teams, and our personal evaluation on the Power Institute at Haas.
It’s tough to succeed in another conclusion. A kilowatt-hour from rooftop photo voltaic reduces system price by about 10 cents (most analyses) to fifteen cents (analyses by rooftop photo voltaic advocates) whereas decreasing that buyer’s invoice by 25-50 cents. That hole between what the photo voltaic buyer saves and what the system saves is as a result of giant share of the worth that pays for mounted prices that don’t decline when a buyer generates energy, together with grid infrastructure and hardening, vegetation administration, power effectivity packages and expertise R&D. That further financial savings to the photo voltaic buyer is roofed by elevating charges for everybody else.
The low system financial savings could appear shocking. In addition to decreasing gasoline prices at energy crops, photo voltaic advocates level to billions of {dollars} that rooftop photo voltaic saves in transmission strains. However these billions might be saved over many many years, so it really works out to lower than a penny per kilowatt-hour. They level to instances the place it delays upgrades to native distribution strains, however one of the best analysis exhibits that it solely actually helps on a tiny share of these strains. They argue it reduces air pollution, however California is now awash in renewables in the course of the day when photo voltaic is producing.
So, if it hasn’t modified its evaluation, why is the CPUC altering its proposal? One sentence in a 2014 legislation — a sentence nearly nobody observed when it was signed — says rooftop photo voltaic coverage should guarantee that the business will “develop sustainably.” Mainly, the PD says the brand new charges will nonetheless create a regressive price shift, however the legislation leaves the CPUC no alternative. There’s no such legislation for different renewable choices — reminiscent of wind energy, grid-scale photo voltaic, and geothermal — all of that are drastically inexpensive than rooftop photo voltaic. The state is solely placing its thumb on the size for photo voltaic on rooftop.
This isn’t the David versus Goliath combat the advocates declare. The utilities could have as soon as been dominant, however Tesla, SunRun and the opposite rooftop photo voltaic corporations are those flexing their legislative/regulatory muscle now, even over vehement objections from the main consumer-protection teams.
California is among the many first movers on renewable power, and the entire world is watching. If we do it proper, we will present the pathway to equitable and cost-effective decarbonization. If we make it into an costly mess, different states and nations will surprise if they’ll afford to observe. California’s rooftop photo voltaic bias is pointing us within the unsuitable path.
Severin Borenstein is a professor at UC Berkeley’s Haas Faculty of Enterprise and school director of the Power Institute at Haas. He’s additionally a member of the Board of Governors of the
California Impartial System Operator.
